Wells Fargo & Company 8-K, filed Jul 21, 2020
Wells Fargo & Company (WFC)
8-K
2020-07-21
For: 2020-07-17
View Original
Added on
April 05, 2026
About this 8-K
Wells Fargo & Company filed this 8-K on July 21, 2020, reporting on events of July 17, 2020.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): July 17, 2020
WELLS FARGO & COMPANY
(Exact name of registrant as specified in its charter)
No. | |||||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |||
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 1-866 -249-3302
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered |
Depositary Shares, each representing a 1/1000th interest in a share of 5.85% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series Q | ||
Depositary Shares, each representing a 1/1000th interest in a share of 6.625% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series R | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b‑2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment |
of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 21, 2020, Wells Fargo & Company (the “Company”) announced that Michael P. Santomassimo will become Senior Executive Vice President and Chief Financial Officer of the Company, effective upon commencement of his employment with the Company in the fall of 2020. Mr. Santomassimo will succeed John R. Shrewsberry, the Company’s current Chief Financial Officer, who informed the Company on July 17, 2020, of his decision to retire from the Company. Mr. Shrewsberry will continue in his role as Chief Financial Officer until Mr. Santomassimo joins the Company and thereafter will assist in the transition until his retirement, which is expected to occur by the end of first quarter 2021. The Company’s news release announcing Mr. Santomassimo’s appointment and Mr. Shrewsberry’s retirement is attached to this report as Exhibit 99.1 and is incorporated by reference into this Item 5.02.
Mr. Santomassimo, age 44, served as Chief Financial Officer of The Bank of New York Mellon Corporation (“BNY Mellon”) since January 2018 and as Chief Financial Officer of BNY Mellon Investment Services from July 2016 until January 2018. Prior to joining BNY Mellon, Mr. Santomassimo served in various roles with JPMorgan Chase & Co., including as Chief Financial Officer for Banking, which included Investment Banking (Advisory and Equity and Debt Capital Markets) as well as Treasury Services, from December 2013 to June 2016.
Under the terms of his offer letter entered into with the Company effective July 17, 2020, Mr. Santomassimo will receive a base salary at an initial annual rate of $1,750,000. For the 2020 performance year, his minimum variable compensation will be $9,250,000, consisting of (i) an annual incentive award under the Wells Fargo Bonus Plan or other applicable annual bonus plan (“Bonus Plan”) with an estimated target value of $1,750,000, and (ii) an annual long-term incentive award under the Company’s Long-Term Incentive Compensation Plan (“LTICP”) with an estimated target value of $7,500,000, in each case subject to (x) his continued employment through the grant date, (y) approval of the Human Resources Committee of the Company’s Board of Directors (“HRC”), and (z) any vesting period and other terms and conditions of the Bonus Plan or the LTICP, as the case may be, including any applicable award agreement.
Mr. Santomassimo’s offer letter also provides that he will receive a one-time “buy-out” award based on the number of unvested shares or units of BNY Mellon common stock that he will forfeit by leaving BNY Mellon, multiplied by the average of the high and low trading prices per share of BNY Mellon common stock on the date he joins the Company (the “Award Value”). The Award Value will be payable in two components: an upfront cash signing bonus in the amount of $900,000, and the remainder in the form of restricted share rights (“RSRs”) granted under the LTICP. The upfront cash signing bonus is subject to Mr. Santomassimo’s continued employment in good standing with the Company through the payment date and is also subject to repayment if his employment ends before completion of one year for a reason specified in the offer letter, with the amount of repayment, if any, based on the reason for termination and the number of months of completed employment prior to termination, as described in the offer letter. The number of RSRs granted to Mr. Santomassimo under the LTICP will be determined by dividing the RSR portion of the Award Value by the average of the high and low trading prices per share of Wells Fargo common stock on the date he joins the Company. The RSR grant is subject to approval by the HRC and Mr. Santomassimo’s active employment with the Company on the grant date. The RSRs will vest in two installments, as follows: 40% in February 2022 and 60% in
February 2023. To the extent not inconsistent with the offer letter, the RSRs will be subject to the terms and conditions of the applicable form of award agreement for executive officers filed as Exhibit 10(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, and incorporated by reference into this Item 5.02.
The foregoing description of Mr. Santomassimo’s offer letter, including the terms of his compensatory arrangements, does not purport to be complete and is qualified in its entirety by reference to the full text of the offer letter, a copy of which is filed as Exhibit 10(a) hereto and incorporated by reference into this Item 5.02.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Description | Location |
Filed herewith | ||
Filed herewith | ||
104 | Cover Page Interactive Data File | Embedded within the Inline XBRL document |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: | July 21, 2020 | WELLS FARGO & COMPANY | |
By: | /s/ ANTHONY R. AUGLIERA | ||
Anthony R. Augliera | |||
Executive Vice President, Deputy General Counsel and Secretary | |||
Exhibit 10(a) Wells Fargo & Company wellsfargo.com July 17, 2020 Michael Santomassimo Subject: Offer of Employment Dear Mike, Congratulations! I am pleased to extend you an offer of employment with Wells Fargo & Company for the position of Chief Financial Officer reporting directly to me. Your start date will be in the fall of 2020 at our location in New York City, NY. BACKGROUND CHECK This offer is contingent upon completion and successful outcome of a background investigation as described in the Conditions of Employment at Wells Fargo section of this letter. Your start date may be affected by the time it takes to complete this process. ANNUAL COMPENSATION As we discussed, your annual base salary rate will be $1,750,000, less applicable taxes and withholdings. You will receive your base salary every two weeks, on the Friday following the end of each two-week pay period. Your base salary compensates you for all hours worked in any given week and your biweekly base salary will be calculated based on the exact number of business days within the calendar year. For the 2020 performance year, your minimum variable compensation will be $9,250,000, which will be comprised of an annual cash bonus and long-term incentive awards, as described below. You will be eligible for an annual bonus under the Wells Fargo Bonus Plan (the “Bonus Plan”), which is generally payable in March of the year following the performance year, based on the successful completion of performance objectives and subject to the terms and conditions of the Bonus Plan, including your active employment on the bonus payment date. For the 2020 performance year, your target bonus eligibility will be $1,750,000. Each year, you will play a part in setting your performance objectives. Incentive compensation awards under the Bonus Plan are discretionary and may be paid in the form of cash, long-term equity, long-term cash, or a combination thereof, at Wells Fargo’s discretion. Final determination of your earned award under the Bonus Plan will be at the discretion of the Human Resources Committee (“HRC”) of the Board of Directors. The determination and payment of bonus compensation and other forms of compensation described in this offer are subject to the conditions and restrictions imposed under applicable laws, rules, regulations and orders. Your rights to, or receipt of, compensation pursuant to this offer may be limited, modified, delayed, cancelled or recovered to ensure compliance with all such applicable laws, rules, regulations, orders and guidance that may be issued thereunder. LONG-TERM INCENTIVE AWARDS As an important component of your annual compensation, you are also eligible to receive annual long-term incentive awards each year beginning with performance year 2020 in the form of performance shares, restricted share rights (“RSRs”) or other forms of long-term awards, or a combination thereof. Annual awards are determined by, and subject to the approval of, the HRC. As we discussed, awards are at the Company’s discretion but a reasonable expectation for this grant would be $7,500,000 in estimated target value, which grant will be subject to the performance criteria, vesting period, and other terms and conditions outlined in the applicable award agreement provided once the award is approved. Note: Equity awards will be made under the Wells Fargo Long Term Incentive Compensation Plan (“LTICP”). Awards under the LTICP are conditioned upon and subject to the approval of the HRC and are subject to such terms and conditions as approved by the HRC in accordance with the provisions of the LTICP as reflected in the applicable award agreement. To align the recipient’s interests with the interests of shareholders generally equity
awards at Wells Fargo are subject to a stock ownership obligation. You will receive specific detailed grant terms and information once the award has been approved by the HRC. BUY-OUT AWARD We would like to offer you a cash payment and one-time equity award in the form of RSRs to replace compensation forfeited resulting from your departure from your prior employer, with an initial valuation of $900,000 in the form of a cash sign-on and $5,422,030 in RSRs (“Buy-out Award”). The final amount of the Buy-out Award will be based on the average of the high and low stock prices of your prior employer on your date of hire, multiplied by the number of unvested shares/units that are being forfeited in connection with your departure from your prior employer, determined at the discretion of the Company and may be adjusted to reflect other relevant factors (“Award Value”). The number of RSRs ultimately granted will be based on the Award Value and the average of the high and low stock prices of Wells Fargo Common Stock on your date of hire. This award is also subject to your providing valid documentation within 60 days of your start date, confirming your forfeited long-term incentive compensation from your prior employer. These RSRs are subject to your active employment with Wells Fargo on the Grant Date and approval by the HRC. We will submit the recommendation at the first regularly scheduled HRC meeting after your employment start date, with the grant effective on the date of HRC approval (the “Grant Date”). Once awarded, these RSRs will vest according to the following schedule: 40% in February 2022 and 60% in February 2023 and may be subject to performance conditions as determined by the HRC. The cash sign-on will be subject to applicable taxes and withholdings and subject to your continued employment and good standing on the pay date, and upon completion of one full year of employment as described below. Although you acknowledge that you are an at-will employee and not being employed for any particular length of time, you understand that this cash sign-on will be made in anticipation of your remaining with Wells Fargo for at least 12 months. You understand this payment will be made as soon as administratively possible, following your first day of employment with the Company. However, you understand and agree that your eligibility to earn this cash sign-on is contingent on completion of one full year of employment. Therefore, in consideration of this offer of employment and the cash sign-on, you agree to reimburse the Company for all or a portion of the cash sign-on (in each case, net of applicable taxes and withholdings) if, during your first year of employment, your employment is either voluntarily terminated by you for any reason, or involuntarily terminated by the Company for Cause1 as follows: If you voluntarily terminate your employment for any reason during your first year of employment, you agree to reimburse the Company 100% of the cash sign-0n. If you are involuntarily terminated by the Company for Cause, you agree to reimburse the Company according to the following schedule: Less than 3 Months in the position: % of Cash Sign-On Owed to the Company: 75% 3 but less than 6 Months in the position: % of Cash Sign-On Owed to the Company: 50% 6 but less than 12 Months in the position: % of Cash Sign-On Owed to the Company: 25% You agree to repay the Company the amount it computes to be due under this agreement on or before the last day of your employment at the Company. To the fullest extent permitted under applicable law, you authorize the Company to deduct up to the entire amount due from any amount owed to you by the Company or any of its subsidiaries or affiliates. Amounts owed to you include, but are not limited to wages, bonuses, incentives or any other form of compensation. If no such deductions are made, or if the deductions made are insufficient to repay the entire amount owed by you, you understand and agree your obligation to pay the Company will continue until you have fully paid all amounts owed pursuant to this agreement. You also specifically agree that the terms of this agreement may not be modified except in writing and no waiver, release or forgiveness of your indebtedness will be valid unless in writing and signed by an officer of the Company. 1 For purposes of this agreement, Cause means (1) your continued failure to substantially perform your duties; (2) your conviction of a crime involving dishonesty or breach of trust, conviction of a felony, or commission of any act that makes you ineligible for coverage under the Company's fidelity bond or otherwise makes you ineligible for continued employment; or (3) your violation of the Company’s policies, including but not limited to Wells Fargo’s Code of Ethics and Business Conduct (or the Code applicable to your line of business), Anti-Bribery and Corruption Policy, Information Security Policies, and Risk Management Accountability Policy. For the avoidance of doubt, an event or conduct constituting Cause could take place before or after your termination of employment.
DEFERRED COMPENSATION You may also be eligible to participate in Wells Fargo's non-qualified deferred compensation plan for highly compensated employees. Under this plan you may elect to defer up to 80% of your base salary and incentive/bonus compensation. You will have 30 days from your start date to enroll for the current plan year, otherwise, you will need to wait until the next enrollment period. BENEFITS PACKAGE Wells Fargo provides a comprehensive benefits to our employees. For most benefit programs, coverage becomes effective the first of the month following one full calendar month of employment. We will provide you with more detailed information soon. If you haven't received your benefits materials by the end of your first workweek, call the Wells Fargo dedicated support center for employees, at 1-877-HRWELLS (1-877-479-3557) to order a benefits enrollment kit. If you don’t enroll during your initial benefits enrollment period, your next annual enrollment opportunity will be for benefits effective the following year. OFFICER TITLE It is our intention to submit a recommendation for a Senior Executive Vice President title after your employment start-date with Wells Fargo. Senior management must approve or recommend corporate titles, which may need to be approved by Wells Fargo or any affiliates’ Board of Directors. You will quickly discover that key values at Wells Fargo include accountability, integrity, customer focus, and diversity. As a financial services institution, we are entrusted with confidential information and the resources of our customers – trust we take very seriously. We also have a responsibility as an employer to share with you some basic conditions of employment at Wells Fargo – you’ll find those within this letter; please read them carefully. NEXT STEPS When you start work, you will receive access to the Handbook for Wells Fargo Team Members, tax forms, and additional paperwork that you will need to get started in your new career. On your first day, please be sure to bring acceptable documents for establishing your employment eligibility as outlined in the Conditions of Employment at the end of this letter. You will need these documents in order to complete your new hire paperwork. Once again, I would like to warmly welcome you to Wells Fargo! Once you have completed your review of the offer letter and Conditions of Employment, as an indication of your acceptance of our offer, please sign the last page of this document. If you have any questions, please contact me. We look forward to having you join us! Sincerely, Charlie Scharf Chief Executive Officer & President
Conditions of Employment at Wells Fargo The offer letter, including these Conditions of Employment, the Trade Secrets Agreement, and the Arbitration Agreement, constitutes the entire agreement between you and Wells Fargo. No other guarantees or promises of any kind have been made concerning the terms of your employment. Only an officer of Wells Fargo, at the level of executive vice president or higher, who is authorized by the senior Human Resources manager for your region or line of business may change or modify these terms. Your employment with Wells Fargo has no specified term or length. Both you and Wells Fargo have the right to terminate your employment at any time, with or without advance notice and with or without cause. This is called "employment at will." This offer is contingent upon your ability to provide, on or before the first day of employment, documentation that verifies your identification and eligibility to work in the United States, as outlined by the Immigration Reform and Control Act of 1986. As a result of federal legislation, and because Wells Fargo is a federal contractor, this offer is also contingent upon your ability to successfully pass the federal E-Verify system check within the requisite period of time permitted by the E-Verify rules. Further, it does not include an offer by Wells Fargo for visa sponsorship. As part of the process to verify your identity and eligibility to work in the United States, you should take the following steps to be prepared on your first day of employment: 1. Access the electronic Form I-9, Employment Eligibility Verification, using the Cisive system. 2. Follow the instructions for completing section 1 of Form I-9. 3. Determine which acceptable document(s) you will provide on your first day of employment to verify your identity and eligibility to work in the United States. The lists of acceptable documents are on Form I-9. Verify that the documents meet the unexpired date(s) requirement under Form I-9 rules. 4. Bring the original document(s) (including a picture ID for E-Verify identification purposes) on your first day and each day thereafter until your manager (or manager's designee) completes the review and verification process. Additionally, all new hires and rehires are required to complete a Team Member Acknowledgment. The form outlines your responsibilities to adhere to the provisions set forth in the Wells Fargo Team Member Handbook, Code of Ethics and Business Conduct, Risk Management Accountability Policy, Information Security Policy overview and the Electronic Human Resources systems authorization. The Code of Ethics policies include restrictions on Personal Conflict of Interest activities, including certain outside activities and a prohibition from engaging in derivative and hedging transactions involving Wells Fargo securities. If you need more information about the policies to understand the impact of these restrictions, please discuss with the hiring manager before accepting this offer. Section 19 of the Federal Deposit Insurance Act prohibits Wells Fargo from hiring any person who has been convicted of a criminal act involving dishonesty, breach of trust, or money laundering (including distribution, manufacturing, or trafficking in controlled substances), unless the person has received prior written consent from the FDIC or the offense meets the FDIC’s de minimis criteria. Under Section 19, disqualifying criminal records include convictions that have not otherwise been completely expunged as well as entry into pre-trial diversion or similar programs with respect to such crimes. Information regarding Section 19 as well as the FDIC waiver process can be found on the FDIC’s website (https://www.fdic.gov/regulations/laws/FORMS/section19.html). All team members must also meet Wells Fargo’s fidelity bond requirements. Therefore, this offer is contingent on the results of your background investigation (both domestic and international, if applicable) which includes fingerprinting, required regulatory reviews and any ongoing screening for continued employment. To protect Wells Fargo’s intellectual property and human capital, all new hires are required to complete a corporate Trade Secrets Agreement. The Trade Secrets Agreement contains an agreement not to disclose Wells Fargo trade secrets and confidential and proprietary information, an agreement for non-solicitation, and assignment of inventions to Wells Fargo if the inventions were made or conceived while you were employed by Wells Fargo. In addition, when employment disputes cannot be resolved internally, it is helpful to do so through private arbitration instead of court. All new hires are required to complete an Arbitration Agreement in which you and Wells Fargo mutually agree to final and binding arbitration of your employment disputes when they cannot be resolved internally.
By signing and submitting this offer letter, you accept and agree to all terms and conditions of this offer of employment. Accepted and agreed to by: /s/ Michael P. Santomassimo_________ 7/17/2020____ Signature for Michael Santomassimo Date
Exhibit 99.1 News Release | July 21, 2020 Wells Fargo Names Mike Santomassimo as New Chief Financial Officer John Shrewsberry to retire from the company following transition SAN FRANCISCO – July 21, 2020 – Wells Fargo & Company (NYSE: WFC) announced today that Mike Santomassimo will join the company in fall 2020 as Chief Financial Officer. Santomassimo will report to CEO Charlie Scharf and serve on the company’s Operating Committee. He will succeed John Shrewsberry, who has announced plans to retire following a successful 22-year career with Wells Fargo, including the last six years as the company’s CFO. Shrewsberry will continue in his role as CFO until Santomassimo joins the company and will assist with the transition thereafter. Santomassimo has more than 20 years of leadership experience in banking and finance. He joins Wells Fargo from BNY Mellon, where he was CFO since 2018. In addition to leading Finance at BNY Mellon, Santomassimo was responsible for the firm’s regulatory relations, enterprise resiliency office, third-party governance and other corporate services. Previously, he served as CFO for the company’s Investment Services businesses. Prior to joining BNY Mellon, he spent 11 years at JPMorgan Chase in a number of key finance leadership roles, including CFO for Banking, which included Investment Banking (advisory and equity & debt capital markets) and Treasury Services. He also served as CFO of JPMorgan’s Securities Services & U.S. Private Banking businesses. He began his career at Smith Barney, where he held a variety of roles including as co-head of the Strategy and Finance team for the brokerage division. “Mike is a strategic-minded CFO with success in building and leading global finance teams that help drive business improvement,” Scharf said. “His experience as the CFO of one of the other seven Globally Systemic Important Banks in the U.S. puts him in a unique position to have immediate impact on Wells Fargo. He is action oriented and will be an important partner to me and our entire Operating Committee as we move our company forward.” Shrewsberry’s retirement comes after a financial services career that spans more than 28 years. Prior to his CFO role, Shrewsberry served as head of Wells Fargo Securities from 2006 through May 2014, where he was responsible for investment banking and capital markets. Previously, he served as group head of Wells Fargo Commercial Capital, the successor to a commercial finance company he co-founded that became part of Wells Fargo. Earlier in his career, he served as a vice president in the fixed-income division at Goldman Sachs and in the principal finance and mortgage finance business lines at Credit Suisse First Boston. “On behalf of the entire Board and management team, I thank John for his many years of dedication and valuable contributions," said Scharf. “When I joined the company last October, John had indicated that he was considering retirement, but he wanted to ensure he was as helpful as he could be in my transition and believes that now is an appropriate time since we have the Operating Committee largely in place. He will be missed. Throughout his tenure, John has served as an excellent financial and strategic leader for our company. During his time as CFO, he has played a significant role in executing numerous financial and operational initiatives while maintaining the company’s strong capital and liquidity positions. He is well-respected throughout the company and the financial community for his strategic insight as well as for his commitment and passion for building strong, personal relationships, and we are grateful for his many years of service to the company.”
Shrewsberry said, "The past 22 years have been rewarding thanks to the talented people I have worked with and the work we have led. It has been my privilege to be surrounded by a dedicated team and some of the brightest minds in financial services. I am proud of the progress we have made and the team we have built, and I have every confidence in the Enterprise Finance team to continue the good work we've begun. I have gotten to know Mike over the last couple of years and recommended him for the job. He is an experienced, well-respected CFO and I am excited about what he will bring to Wells Fargo.” About Wells Fargo Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.97 trillion in assets. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, investment and mortgage products and services, as well as consumer and commercial finance, through 7,300 locations, more than 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 31 countries and territories to support customers who conduct business in the global economy. With approximately 266,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 30 on Fortune’s 2020 rankings of America’s largest corporations. News, insights and perspectives from Wells Fargo are also available at Wells Fargo Stories. Additional information may be found at www.wellsfargo.com | Twitter: @WellsFargo. Contact Information Media Peter Gilchrist, (704) 715-3213 Peter.gilchrist@wellsfargo.com Investor Relations John Campbell, (415) 396-0523 john.m.campbell@wellsfargo.com ### 2 July 2020 | News Release